Porter’s Five Forces Model

Threat of Substitutes (High)

 Harder competition due to attractive investment growth rates

 Existence of handful of notable real estate companies
 Price promotions like “low-cost housing” is abundant
 New entrants increasing rivalry
 Competition of substitutes dubbed as “Street fighting”
especially in the residential segment


Bargaining Power of Bargaining Power of

Suppliers (Moderate) Rivalry among Real Estate
Buyers (Moderate)
Corporations (Moderate to High)
 Abundance of notable  Availability of the
construction  Growth of the Real Estate
internet
companies and many industry
 Abundant & elastic
smaller ones  Rapid urbanization
demand of
 Products are of the  Very flexible prices
investors & buyers
same properties and  Increasing disposable income
 Fairly high number
functionality and tourism
of competitors
 Fairly abundant  Switching costs are low
 Consumers unable
amount of idle land in  The domination of Top to influence the
rural areas players: Ayala land, Mega profitability of the
 Lack of idle land in World Corp., SM Prime industry because
urban areas especially Holdings
of fixed prices
in major cities

Threat of New Entrants (Moderate)

 Fairly easy to break barriers for market entry

 High investment growth rates
 Demand is High
 President Duterte lifting the limits on foreign investment
 Steady GDP growth of the country
 Surging IT-BPO sector attractive to investors
 Entering the Real Estate sector would require vast amounts
of capital
Sources:

http://www.manilatimes.net/housing-segment-most-competitive-market-in-ph/235477/

http://filipinohomes.com/blog/online-trends-affecting-philippine-real-estate/

https://www.lamudi.com.ph/whitepaper-2017

https://www.globalpropertyguide.com/Asia/Philippines/rent-yields

http://business.inquirer.net/240874/duterte-ask-congress-rush-removal-foreign-investment-limits

https://www.prnewswire.com/news-releases/philippines-real-estate-market-outlook-to-2020---driven-
by-rapid-growth-of-bpo-sector-and-increased-demand-of-retail-and-commercial-properties-
300338394.html